CONSTITUTIONAL COURT OF SOUTH AFRICA CONGRESS OF SOUTH AFRICAN TRADE UNIONS

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1 CONSTITUTIONAL COURT OF SOUTH AFRICA Case CCT 85/06 [2007] ZACC 22 Z SIDUMO CONGRESS OF SOUTH AFRICAN TRADE UNIONS First Applicant Second Applicant versus RUSTENBURG PLATINUM MINES LTD COMMISSION FOR CONCILIATION, MEDIATION AND ARBITRATION COMMISSIONER MOROPA First Respondent Second Respondent Third Respondent Heard on : 8 May 2007 Decided on : 5 October 2007 JUDGMENT NAVSA AJ: 1 Introduction [1] In this case, issues of importance to employees and employers alike arise because of two key findings by the Supreme Court of Appeal (Cameron JA, with 1 Navsa AJ is a judge with the Supreme Court of Appeal who, at the time of this judgment, was appointed as an Acting Justice of this Court for the period 15 February to 30 June 2007.

2 NAVSA AJ Harms, Cloete, Lewis and Maya JJA concurring). 2 The question is whether the findings are correct. In summary the findings are the following: 3 (a) In deciding dismissal disputes in terms of the compulsory arbitration provisions of the Labour Relations Act 66 of 1995 (LRA), commissioners acting under the auspices of the Commission For Conciliation, Mediation and Arbitration (CCMA), should approach a dismissal with a measure of deference because it is primarily the function of the employer to decide on a proper sanction. In deciding whether a dismissal is fair a commissioner need not be persuaded that dismissal is the only fair sanction it is sufficient that the employer establishes that it is a fair sanction. (b) Compulsory statutory arbitration in terms of the LRA undertaken by the second respondent, the CCMA, constitutes administrative action as defined in section 1 of the Promotion of Administrative Justice Act 3 of 2000 (PAJA) and is therefore subject to the standard of review set under that Act rather than that provided for in the LRA the review criterion is whether the decision is rationally connected with the information before the commissioner and the reasons for it. [2] The applicants and the CCMA adopt the position that the Supreme Court of Appeal erred in relation to the first finding in that, on a proper interpretation of section 23 of the Constitution and the relevant provisions of the LRA, commissioners should 2 Rustenburg Platinum Mines Ltd (Rustenburg Section) v Commission for Conciliation, Mediation and Arbitration 2007 (1) SA 576 (SCA); [2006] 11 BLLR 1021 (SCA); (2006) 27 ILJ 2076 (SCA). 3 See the key and associated findings by the Supreme Court of Appeal id at para 48. 2

3 NAVSA AJ determine whether a dismissal was fair without deference to either side in the dispute. In respect of the second finding, the applicants and the CCMA submit that the Supreme Court of Appeal erred in that CCMA arbitrations are judicial proceedings and not administrative action and are consequently not subject to review in terms of section 33 of the Constitution and PAJA. The first respondent supports the Supreme Court of Appeal s findings. Background [3] The first applicant is Mr Z Sidumo. The litigation leading up to the present proceedings had its origins in his dismissal a long time ago. On 2 December 1985 the first respondent, Rustenburg Platinum Mines Ltd (the Mine), which as its name suggests, is a company principally involved in mining platinum, employed Mr Sidumo as part of its Security Services. He was a constable until Thereafter he was promoted to the position of a Grade II patrolman. On 20 January 2000, Mr Sidumo was transferred to the Waterval Redressing Section, where he was responsible for access control. On 26 June 2000, he was dismissed from his job at the Redressing Section. He contested his dismissal. Up until the events leading up to his dismissal, Mr Sidumo had a clean disciplinary record for a period of almost 15 years. [4] Little did Mr Sidumo know that after an internal disciplinary inquiry, an internal appeal and litigation in three courts over a long period of time, his dismissal dispute with his employer would remain unresolved. He could hardly have imagined 3

4 NAVSA AJ that almost seven years later it would be contended before this Court that decisions in relation to his individual dismissal dispute raised important constitutional questions. [5] The Waterval Redressing Section is a high security facility near Rustenburg that provides benefaction services, separating high grade precious metals such as platinum, rhodium and gold from lower grade concentrate. These metals are extremely valuable and are the livelihood and core business of the Mine. [6] Mr Sidumo was dismissed for negligently failing to apply established and detailed individual search procedures, significantly different from the random search procedure followed in his earlier posting, prior to his transfer to the Redressing Section. The search procedures were part of the overall effort to minimise losses due, amongst other things, to theft. The dismissal followed on an internal disciplinary inquiry and an internal appeal. Subsequently, Mr Sidumo referred an unfair dismissal dispute to the CCMA in terms of section 191(1)(a) of the LRA. 4 [7] Conciliation failed, and thereafter Mr Sidumo, in terms of section 191(5)(a) of the Act, 5 successfully challenged his dismissal under the compulsory arbitration 4 Section 191(1)(a) of the LRA provides: If there is a dispute about the fairness of a dismissal, or a dispute about an unfair labour practice, the dismissed employee or the employee alleging the unfair labour practice may refer the dispute in writing to (i) a council, if the parties to the dispute fall within the registered scope of that council; or (ii) the Commission, if no council has jurisdiction. 5 Section 191(5)(a) of the LRA provides: If a council or a commissioner has certified that the dispute remains unresolved, or if 30 days have expired since the council or the Commission received the referral and the dispute remains unresolved 4

5 NAVSA AJ provisions of the LRA administered by the CCMA. The third respondent found Mr Sidumo guilty of misconduct but held that dismissal was not an appropriate or fair sanction. He reinstated Mr Sidumo with three months compensation subject to a written warning valid for three months. I refer to the third respondent as the Commissioner. [8] The Mine applied to the Labour Court, in terms of section 145 of the LRA, to review and set aside the Commissioner s award. The interpretation and application of section 145 loom large in this case and will be dealt with in greater detail in due course. [9] The Labour Court held that the award did not contain any reviewable irregularity and dismissed the application with costs. The Mine appealed to the Labour Appeal Court, 6 which held, that although some of the Commissioner s reasons for reinstating Mr Sidumo were questionable, his finding, that dismissal was too harsh (a) 6 Section 173(1) of the LRA provides: the council or the Commission must arbitrate the dispute at the request of the employee if (i) the employee has alleged that the reason for dismissal is related to the employee s conduct or capacity, unless paragraph (b) (iii) applies; (ii) the employee has alleged that the reason for dismissal is that the employer made continued employment intolerable or the employer provided the employee with substantially less favourable conditions or circumstances at work after a transfer in terms of section 197 or 197A, unless the employee alleges that the contract of employment was terminated for a reason contemplated in section 187; (iii) the employee does not know the reason for dismissal; or (iv) the dispute concerns an unfair labour practice... Subject to the Constitution and despite any other law, the Labour Appeal Court has exclusive jurisdiction (a) to hear and determine all appeals against the final judgments and the final orders of the Labour Court; and (b) to decide any question of law reserved in terms of section 158(4). 5

6 NAVSA AJ a sanction, was justified. The Labour Appeal Court dismissed the Mine s appeal with costs. A subsequent appeal to the Supreme Court of Appeal resulted in success for the Mine. 7 The Supreme Court of Appeal overturned the decisions of both the Labour Court and the Labour Appeal Court and substituted the finding of the Commissioner with a determination that the dismissal was fair. Mr Sidumo then applied to this Court for leave to appeal the judgment of the Supreme Court of Appeal. Intervention by COSATU [10] The second applicant, the Congress of South African Trade Unions (COSATU), 8 which was not a party to the preceding litigation, now applies for leave to appeal in this Court in its own name and in support of Mr Sidumo. At the time of his dismissal, Mr Sidumo was a member of a COSATU affiliate, namely, the National Union of Mineworkers. COSATU has applied for leave to appeal on the basis that the findings of the Supreme Court of Appeal have far-reaching, adverse implications for its members and affiliates. It submitted that it should be afforded standing in relation to questions that are fundamental to the industrial relations community at large. The Mine opposed the intervention at this late stage. The question of COSATU s standing and its explanation concerning its late entry will be dealt with later. [11] Both Mr Sidumo and COSATU contended that the question of the correctness of the Supreme Court of Appeal s judgment raises constitutional issues. The 7 In terms of section 168(3) of the Constitution, the Supreme Court of Appeal is the highest court of appeal in matters other than constitutional matters. See also National Union of Mineworkers v Fry s Metals (Pty) Ltd 2005 (5) SA 433 (SCA); [2005] 5 BLLR 430 (SCA); (2005) 26 ILJ 689 (SCA) at paras COSATU is the largest federation of trade unions in the country with 21 affiliated unions representing over 1,8 million employees. 6

7 NAVSA AJ applications for leave to appeal have been filed outside of the prescribed time limits and are therefore accompanied by an application for condonation. These are aspects to which I will revert. The internal disciplinary hearing and appeal [12] A senior superintendent at the Mine, Mr Page, conducted the internal disciplinary hearing where Mr Sidumo was charged as follows: (1) Negligence Failure to follow established procedures in terms of the Protection Services Department search procedure. Which caused prejudice or possible prejudice to the Company in terms of production loss. (2) Failure to follow established procedures in terms of the Protection Services Department search procedures. [13] The facts on which Mr Page s findings were based were largely uncontested. Mr Sidumo, was however, aggrieved at the lack of training he had received in relation to his position at the Waterval Redressing Section. He also alleged that he had not been properly informed that the search procedures at the Redressing Section were significantly different from the random searches his previous job required. [14] Mr Sidumo s main duty at the Redressing Section was to safeguard the Mine s precious metals. The detailed compulsory search procedures for all persons leaving the Redressing Section entailed an individual search of each person in a private cubicle, with close personal inspection plus a metal detector scan. The procedures were in written form and were distributed and made known to all, including Mr 7

8 NAVSA AJ Sidumo. In August 1999 he signed a document acknowledging that they had been read and explained to him. [15] The Mine s production continued to decrease and possible causes for the decline, including inefficient processes, poor ore quality and outdated machinery were investigated. Over three days, in April 2000, the Mine resorted to video surveillance of employee performance at various points, including the point where Mr Sidumo did duty at the Redressing Section. This revealed that of 24 specifically monitored instances involving Mr Sidumo, he conducted only one search in accordance with established procedures. On eight occasions he conducted no search at all. Fifteen other searches did not conform to procedures. The video also revealed that Mr Sidumo allowed persons to sign the search register without conducting any search at all. [16] Mr Page found Mr Sidumo guilty of misconduct in the form of negligence and failure to follow procedures. He concluded that the misconduct had created potential production losses/theft. In mitigation, he accepted that nothing went out during your shift, as far as you know and took into account Mr Sidumo s service record. That notwithstanding, he found that the misconduct went to the heart of Mr Sidumo s capacity as a member of the Mine s Protection Services and that the relationship of trust had broken down, making a future relationship intolerable. Mr Sidumo was dismissed. 8

9 NAVSA AJ [17] Mr Sidumo lodged an internal appeal. Another senior employee, Mr Denner, conducted the appeal hearing. He held that since Mr Sidumo had not been charged with dishonesty, the fact that losses had not occurred was irrelevant the charge was negligently failing to follow procedures. He considered it important that through Mr Sidumo s wrongdoing the Mine could have suffered losses. He considered alternatives to dismissal but found none appropriate. The appeal was dismissed. The CCMA [18] An arbitration under the auspices of the CCMA is a hearing de novo. 9 The relevant additional evidence adduced at the CCMA is set out hereafter. Mr Botes, one of Mr Sidumo s supervisors, who was responsible for the video surveillance, testified that during the surveillance period, though not on Mr Sidumo s watch, one thief had been caught with materials worth R hidden between his legs. Mr Botes was adamant that Mr Sidumo was aware of how to conduct searches. Mr Sidumo had, after all, been posted to that security checkpoint to conduct searches. He conceded that the tasks entrusted to Mr Sidumo would normally have been carried out by employees graded as senior patrolpersons. Mr Sidumo, however, had been posted to the Redressing Section because of his longstanding experience in Protection Services. Mr Botes accepted that the Mine s disciplinary code entailed that disciplinary and 9 Sections 138(1) and (2) of the LRA accord the commissioner a discretion to determine the manner and form of proceedings. In terms of section 138(2), subject to the discretion of the commissioner, a party may give evidence, call witnesses and address concluding arguments to the commissioner. In County Fair Foods (Pty) Ltd v CCMA & Others [1999] 11 BLLR 1117 (LAC); (1999) 20 ILJ 1701 (LAC) at para 11, the following appears: However, the decision of the arbitrator as to the fairness or unfairness of the employer s decisions is not reached with reference to the evidential material that was before the employer at the time of its decision but on the basis of all the evidential material before the arbitrator. To that extent the proceedings are a hearing de novo. 9

10 NAVSA AJ corrective measures be put in place to ensure that employees are put on the right track. [19] Mr Williams, the Mine s assistant chief chemist testified that in his view, the major losses that occurred, which led to the video surveillance being installed, were due to the poor quality of the metallics. According to Mr Williams, the daily production yield loss was in the region of R Mr Sidumo testified and claimed that he had received no training in relation to the search procedures and further, that he had objected to his posting to the Redressing Section. [20] The Commissioner rejected both claims. He held that the rule that searches should be conducted in a particular manner was valid and that Mr Sidumo had contravened the rule. The Commissioner had regard to section 188(2) of the LRA which compels a person, when considering whether or not a reason for dismissal is fair, to take into account the Code of Good Practice (the Code) contained in Schedule 8 to the LRA. 10 The Commissioner did so and, in particular, considered article 7(b)(iv), which provides that a person determining whether dismissal for misconduct was fair should consider whether the dismissal was an appropriate sanction. 10 Section 203 of the LRA provides that the National Economic Development and Labour Council (NEDLAC) may publish a Code of Good Practice. Section 203(4) states that the Code may provide that it must be taken into account in applying or interpreting any employment law. Section 3 of the National Economic, Development and Labour Council Act 35 of 1994 in terms of which NEDLAC was established, provides that it shall consist of members representing organised business; organised labour; organisations of community and development interests; and the State. It is therefore safe to conclude that, at the very least, it can be said that the Code contains the norms and values set by the industrial relations community. 10

11 NAVSA AJ [21] The Commissioner took the view that the concept of progressive discipline, endorsed by the Labour Court, was applicable. In terms of this concept employee behaviour is to be corrected through a system of graduated disciplinary measures, such as counselling and warning. The Commissioner considered Mr Sidumo s service record in his favour. He concluded that dismissal was too harsh a sanction and motivated it as follows: There had been no losses suffered by the Mine; the violation had been unintentional or had been a mistake ; and Mr Sidumo had not been dishonest. Before making his award the Commissioner stated that he did not consider the offence committed by Mr Sidumo to go into the heart of the relationship [with the employer], which is trust. The Labour Court and the Labour Appeal Court [22] In applying to the Labour Court to review the Commissioner s award, the Mine took the view that the Commissioner had erred in concluding that no losses had been suffered by the Mine, that the violation of the rule had been unintentional or a mistake and that Mr Sidumo s honesty was a factor to be considered in his favour. It was submitted on behalf of the Mine that there had been evidence that, for the period February to May 2000, there had been revenue loss of approximately R per day. It had been shown that precious metals had been found on persons during the surveillance period. It was materially relevant, contended the Mine, that Mr Sidumo had been specifically employed to prevent theft and that he had conducted only one proper search over the surveillance period In fact only one proper search was conducted during a specifically monitored period and not for the entire period of the surveillance. 11

12 NAVSA AJ [23] It was submitted on behalf of the Mine that the Commissioner s reasons were irrational and that there was no link between the evidence and his factual conclusions. The Commissioner s finding that the misconduct did not go to the heart of the relationship was also criticised as being irrational. The Mine contended that the Commissioner had been so grossly careless that he could rightly be described as having committed misconduct. It was submitted that the Commissioner had failed to apply his mind to such an extent that the Mine did not have a fair hearing and furthermore, that the Commissioner had exceeded his powers. [24] The Labour Court considered that employees who perform poorly (which was how it categorised Mr Sidumo s misconduct), but who had not been dishonest, should not automatically face dismissal. It took into account Mr Sidumo s service record. It did not disapprove of the Commissioner s application of the principle of corrective or progressive discipline. The Labour Court found that there was not an iota of evidence that theft had occurred during Mr Sidumo s shift. It thought it significant that he had been doing work usually assigned to a more senior employee. [25] The Labour Court considered the test for review of a commissioner s award as enunciated by the Labour Appeal Court in Carephone (Pty) Ltd v Marcus NO and Others:: (3) SA 304 (LAC); 1998 (11) BLLR 1093 (LAC); (1998) 19 ILJ 1425 (LAC). Carephone was decided before the advent of PAJA. 12

13 NAVSA AJ It seems to me that one will never be able to formulate a more specific test other than, in one way or another, asking the question: is there a rational objective basis justifying the connection made by the administrative decision-maker between the material properly available to him and the conclusion he or she eventually arrived at? In time only judicial precedent will be able to give more specific content to the broad concept of justifiability in the context of the review provisions in the LRA. 13 The Labour Court concluded, with reference to the grounds of review set out in section 145 of the LRA and the test in Carephone, that there was no basis upon which it could interfere with the Commissioner s award. [26] The Mine appealed to the Labour Appeal Court. 14 That court was critical of the Commissioner. It rejected his finding that no losses had been suffered by the company as a result of Mr Sidumo s failure to conduct proper searches. The court stated that it could not be ruled out that individuals who had not been searched might have departed with precious metals on their person. [27] In respect of the Commissioner s findings that the misconduct was unintentional or a mistake and that Mr Sidumo s honesty was a factor to be taken into account in his favour, the Labour Appeal Court had the following to say: It is not clear what the [Commissioner] meant when he said that the violation of the rule by [Mr Sidumo] was unintentional or a mistake. He might have been referring to the fact that one of the offences that [Mr Sidumo] was found guilty of was based on negligent conduct as opposed to intentional conduct. He did not elaborate on this but, even if that were the position, that would have had to be taken into account in the 13 Id at para The Labour Appeal Court s judgment is reported as Rustenburg Platinum Mines Ltd v CCMA & Others [2004] 1 BLLR 34 (LAC). 13

14 NAVSA AJ light of all the circumstances. Quite frankly, how the third factor, namely, honesty, came into the picture in this case, is baffling. No dishonesty by [Mr Sidumo] was alleged. 15 [28] The Labour Appeal Court went on to state that, had the reasons referred to been the sole basis of the Commissioner s award, it would have had no hesitation in holding that the award was unjustifiable. It noted, however, that the Commissioner took Mr Sidumo s service record into account. The court also observed that the Commissioner suggested graduated disciplinary measures such as counselling and a warning. The court thought it material that in its founding affidavit in the Labour Court, the Mine failed to challenge the Commissioner s findings on these aspects. The Labour Appeal Court concluded that Mr Sidumo s clean lengthy service record was capable of sustaining the finding 16 that the sanction of dismissal was too harsh. It dismissed the appeal. The Mine appealed the Labour Appeal Court s judgment to the Supreme Court of Appeal. The Supreme Court of Appeal The first finding deference [29] The Supreme Court of Appeal held that the Commissioner failed properly to appreciate the ambit of his duties under the LRA and therefore incorrectly approached the task entrusted to him in determining whether the employer s decision was fair. 17 In formulating what it considered to be the correct approach the Supreme Court of 15 Id at para Id at para Above n 2 at para

15 NAVSA AJ Appeal held that the discretion to impose a sanction for misconduct belongs in the first instance to the employer. 18 The Supreme Court of Appeal referred with approval to the following dictum of the Labour Appeal Court in Nampak Corrugated Wadeville v Khoza: 19 The determination of an appropriate sanction is a matter which is largely within the discretion of the employer. However, this discretion must be exercised fairly. A court should, therefore, not lightly interfere with the sanction imposed by the employer unless the employer acted unfairly in imposing the sanction. The question is not whether the court would have imposed the sanction imposed by the employer, but whether in the circumstances of the case the sanction was reasonable. 20 [30] The Supreme Court of Appeal summarised the key elements of the approach in Nampak as follows: (a) the discretion to dismiss lies primarily with the employer; (b) the discretion must be exercised fairly; and (c) interference should not lightly be contemplated. 21 [31] The Supreme Court of Appeal also referred with approval to the following dictum of Ngcobo AJP (as he then was) in County Fair: [C]ommissioners must approach their functions with caution. They must bear in mind that their awards are final there is no appeal against their awards. In particular, commissioners must exercise greater caution when they consider the fairness of the sanction imposed by an employer. They should not interfere with the sanction merely because they do not like it. There must be a measure of deference to 18 Id at para [1999] 2 BLLR 108 (LAC); (1999) 20 ILJ 578 (LAC). 20 Id at para Above n 2 at para

16 NAVSA AJ the sanction imposed by the employer subject to the requirement that the sanction imposed by the employer must be fair. The rationale for this is that it is primarily the function of the employer to decide upon the proper sanction..... The mere fact that the commissioner may have imposed a somewhat different sanction or a somewhat more severe sanction than the employer would have, is no justification for interference by the commissioner..... In my view, interference with the sanction imposed by the employer is only justified where the sanction is unfair or where the employer acted unfairly in imposing the sanction. This would be the case, for example, where the sanction is so excessive as to shock one s sense of fairness. In such a case, the commissioner has a duty to interfere. 22 [32] The Supreme Court of Appeal considered that two further points emerged from the County Fair judgment namely, (d) that commissioners should use their powers to intervene with caution, and (e) that they must afford the sanction imposed by the employer a measure of deference. 23 In its view, the analysis in the Nampak and County Fair judgments was: [F]irmly rooted in the prescripts of the statute and affords an approach to the duties of commissioners that is not only fair and practicable, but would also shield the labour courts from the very flood of litigation the alternative tests have mistakenly been designed to avoid Above n 9 at paras Above n 2 at para Id at para

17 NAVSA AJ The following then appears in the Supreme Court of Appeal s judgment: It is in my view regrettable that the LAC has not consistently affirmed and applied the analysis. Although some panels have affirmed Ngcobo AJP s approach, this case indicates how far the practice of the LAC has on occasion strayed from it.... Instead of exhorting commissioners to exercise greater caution when intervening, and to show a measure of deference to the employer s sanction so long as it is fair, it has insulated commissioners decisions from intervention by importing unduly constrictive criteria into the review process. 25 (Footnote omitted.) [33] According to the Supreme Court of Appeal there were three main reasons underlying the analysis of Ngcobo AJP. The first was textual, the second conceptual and the third institutional. In relation to the first, the Supreme Court of Appeal pointed to section 188(2) of the LRA, which obliged commissioners in considering whether or not the reasons for a dismissal were fair, to take into account the Code of Good Practice. Item 7(b)(iv) of the Code requires a commissioner to consider whether dismissal was an appropriate sanction. The use of the indefinite an as opposed to the definite the was, in the view of the Supreme Court of Appeal, important. It showed that the legislature had in mind that there could be a range of responses. The Code states that it is generally inappropriate to dismiss employees for a first offence unless a continued relationship would be intolerable. This, reasoned the Supreme Court of Appeal, meant that a measure of subjectivity was brought into play. It followed that the primary assessment of intolerability unavoidably belonged to the employer. 25 Id. 17

18 NAVSA AJ [34] Turning to the conceptual aspect, the Supreme Court of Appeal stated that the concept of fairness is not absolute. It affords a range of possible responses. In this regard the court referred to Todd and Damant who state the following: The court must necessarily recognize that there may be a range of possible decisions that the employer may take, some of which may be fair and some of which may be unfair. The court s duty is to determine whether the decision that the employer took falls within the range of decisions that may properly be described as being fair. 26 (Footnote omitted.) The court concluded as follows on this aspect: The fact that the commissioner may think that a different sanction would also be fair, or fairer, or even more than fair, does not justify setting aside the employer s sanction. 27 [35] Dealing with the institutional aspect, the Supreme Court of Appeal stated that the solution to the problem of a flood of challenges to awards lay in pointing commissioners firmly to the limits of the statute. It reasoned that if commissioners could freely substitute their judgment and discretion for the judgment and discretion of the employer, employees would take every case to the CCMA. The second finding PAJA or the LRA? [36] It is necessary to set out in some detail the Supreme Court of Appeal s reasoning in this regard. First, the Supreme Court of Appeal considered sections 26 Todd and Damant Unfair Dismissal Operational Requirements (2004) 25 ILJ 896 at 907 quoted above in n 2 at para Above n 2 at para

19 NAVSA AJ 145(1) and (2) and section 158(1)(g) of the LRA. The relevant parts of section 145, which contain the grounds of review, provide: (1) Any party to a dispute who alleges a defect in any arbitration proceedings under the auspices of the Commission may apply to the Labour Court for an order setting aside the arbitration award (a) within six weeks of the date that the award was served on the applicant... (2) A defect referred to in subsection (1), means (a) that the commissioner (i) committed misconduct in relation to the duties of the commissioner as an arbitrator; (ii) committed a gross irregularity in the conduct of the arbitration proceedings; or (iii) exceeded the commissioner s powers; or (b) that an award had been improperly obtained. [37] Section 158 (1) (g) reads as follows: The Labour Court may (g) subject to 28 section 145, review the performance or purported performance of any function provided for in this Act on any grounds that are permissible in law. (Footnote added.) [38] The Supreme Court of Appeal then referred with approval to Carephone, where the application of these two sections was discussed. The Labour Appeal Court in Carephone was not prepared to hold that section 158(1)(g) created a separate and more expansive basis of review of CCMA awards. It held that the administrative 28 The Labour Relations Amendment Act 12 of 2002 replaced the word despite, as the first word in subsection (g), with the words subject to. 19

20 NAVSA AJ justice provisions of the Constitution (as it read then) suffused the grounds of review under section 145 of the LRA, thereby extending the scope of review of CCMA awards. The Labour Appeal Court stated that section 33 of the Constitution 29 read with item 23(2)(b) of Schedule 6 to the Constitution 30 extended the scope of review and introduced a requirement of rationality in the outcome of decisions: The peg on which the extended scope of review has been hung is the constitutional provision that administrative action must be justifiable in relation to the reasons given for it (s 33 and item 23 (b) of Schedule 6 to the Constitution). This provision introduces a requirement of rationality in the merit or outcome of the administrative decision. This goes beyond mere procedural impropriety as a ground for review, or irrationality only as evidence of procedural impropriety Section 33 of the Constitution provides: (1) Everyone has the right to administrative action that is lawful, reasonable and procedurally fair. (2) Everyone whose rights have been adversely affected by administrative action has the right to be given written reasons. (3) National legislation must be enacted to give effect to these rights, and must (a) provide for the review of administrative action by a court or, where appropriate, an independent and impartial tribunal; (b) impose a duty on the state to give effect to the rights in subsections (1) and (2); and (c) promote an efficient administration. 30 The relevant part of item 23(2) of Schedule 6 reads as follows: Until the legislation envisaged in sections 32(2) and 33(3) of the new Constitution is enacted... (b) section 33(1) and (2) must be regarded to read as follows: Every person has the right to (a) lawful administrative action where any of their rights or interests is affected or threatened; (b) procedurally fair administrative action where any of their rights or legitimate expectations is affected or threatened; (c) be furnished with reasons in writing for administrative action which affects any of their rights or interests unless the reasons for that action have been made public; and (d) administrative action which is justifiable in relation to the reasons given for it where any of their rights is affected or threatened. 31 Above n 12 at para

21 NAVSA AJ The Labour Appeal Court stated that, when the Constitution requires administrative action to be justifiable 32 in relation to the reasons given for it, it seeks to give expression to the fundamental values of accountability, responsiveness and openness. 33 The test formulated by the Labour Appeal Court 34 was based directly on the wording contained in the very last part of item 23(2) of Schedule 6 to the Constitution 35 which was part of the wording of sections 33(1) and (2) of the Constitution pending the promulgation of the national legislation which, as it turned out, was PAJA. [39] The Labour Appeal Court described this approach as one of substantive rationality, 36 likening it to administrative law concepts such as reasonableness, rationality and proportionality. In Carephone, it considered statutory arbitrations conducted in terms of the LRA to be administrative in nature and therefore reviewable on that basis. [40] Mindful of the fact that its approach might have the effect of blurring the line between appeal and review, the court said: In determining whether administrative action is justifiable in terms of the reasons given for it, value judgments will have to be made which will, almost inevitably, involve the consideration of the merits of the matter in some way or another. As 32 This is a reference to item 23(2)(b) to Schedule Above n 12 at para See para [25] above. 35 Above n See para [25] above. 21

22 NAVSA AJ long as the Judge determining this issue is aware that he or she enters the merits not in order to substitute his or her own opinion on the correctness thereof, but to determine whether the outcome is rationally justifiable, the process will be in order. 37 [41] After discussing Carephone, the Supreme Court of Appeal went on to consider the decision in Shoprite Checkers (Pty) Ltd v Ramdaw NO and Others, 38 where the Labour Appeal Court considered the possible effect of the enactment of PAJA on section 145(2) of the LRA and found it unnecessary to decide whether PAJA applied. The Labour Appeal Court did so on the basis that the dictum in Carephone referred to in paragraph [25] above is in line with the following statements of this Court in Pharmaceutical Manufacturers Association of SA and Another: In re Ex parte President of the Republic of South Africa and Others: 39 It is a requirement of the rule of law that the exercise of public power by the Executive and other functionaries should not be arbitrary. Decisions must be rationally related to the purpose for which the power was given, otherwise they are in effect arbitrary and inconsistent with this requirement. It follows that in order to pass constitutional scrutiny the exercise of public power by the Executive and other functionaries must, at least, comply with this requirement. If it does not, it falls short of the standards demanded by our Constitution for such action. The question whether a decision is rationally related to the purpose for which the power was given calls for an objective enquiry. Otherwise a decision that, viewed objectively, is in fact irrational, might pass muster simply because the person who took it mistakenly and in good faith believed it to be rational. Such a conclusion 37 Above n 12 at para (4) SA 1038 (LAC); [2001] 9 BLLR 1011 (LAC); 2001 (22) ILJ 1603 (LAC) at para (2) SA 674 (CC); 2000 (3) BCLR 241 (CC). 22

23 NAVSA AJ would place form above substance and undermine an important constitutional principle. 40 (Footnote omitted.) [42] After comparing the grounds of review under section 145 of the LRA with the more extensive provisions of section 6(2) of PAJA, 41 the Supreme Court of Appeal decided that PAJA, by necessary implication, extended the available remedies to parties to CCMA arbitrations and that PAJA superseded the specialised enactment of the LRA. Parliament enacted PAJA because of a constitutional obligation to give effect to the right to just administrative action embodied in the Constitution. That obligation, the Supreme Court of Appeal said, did not exempt from its ambit previous 40 Id at paras Section 6(2) of PAJA provides: A court or tribunal has the power to judicially review an administrative action if (a) the administrator who took it (i) was not authorised to do so by the empowering provision; (ii) acted under a delegation of power which was not authorised by the empowering provision; or (iii) was biased or reasonably suspected of bias; (b) a mandatory and material procedure or condition prescribed by an empowering provision was not complied with; (c) the action was procedurally unfair; (d) the action was materially influenced by an error of law; (e) the action was taken (i) for a reason not authorised by the empowering provision; (ii) for an ulterior purpose or motive; (iii) because irrelevant considerations were taken into account or relevant considerations were not considered; (iv) because of the unauthorised or unwarranted dictates of another person or body; (v) in bad faith; or (vi) arbitrarily or capriciously; (f) the action itself (i) contravenes a rule of law or is not authorised by the empowering provision; or (ii) is not rationally connected to (aa) the purpose for which it was taken; (bb) the purpose of the empowering provision; (cc) the information before the administrator; or (dd) the reasons given for it by the administrator; (g) the action concerned consists of a failure to take a decision; (h) the exercise of the power or the performance of the function authorised by the empowering provision, in pursuance of which the administrative action was purportedly taken, is so unreasonable that no reasonable person could have so exercised the power or performed the function; or (i) the action is otherwise unconstitutional or unlawful. 23

24 NAVSA AJ parliamentary enactments, such as section 145, that conferred rights of administrative review. This was so, notwithstanding that the LRA is a specialised statute. [43] In this regard the Supreme Court of Appeal relied on the decision of this Court in Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Others 42 where it was stated that section 6 of PAJA revealed a clear purpose to codify the grounds of judicial review of administrative actions. 43 The Constitution required PAJA to cover the field and it did so. 44 The Supreme Court of Appeal reasoned that a slightly different path would lead to the same conclusion. It explained that path as follows: At the time the LRA was enacted, the interim Constitution required that administrative action be justifiable in relation to the reasons given for it. For the reasons set out in Carephone, this right suffused the interpretation of s 145(2). When the administrative-justice provisions of the Constitution, as embodied in PAJA, superseded those of the interim Constitution, it could not have been intended that parties to CCMA arbitrations should enjoy a lesser right of administrative review than that afforded under the interim Constitution. The repeal of the interim Constitution and its replacement by the Constitution did, in other words, not diminish the review entitlement under s 145(2). Section 6(2) of PAJA is the legislative embodiment of the grounds of review to which arbitration parties became entitled under the Constitution. 45 [44] The only tension in relation to reconciling section 145 of the LRA with the provisions of PAJA, so the Supreme Court of Appeal reasoned, was in relation to time (4) SA 490 (CC); 2004 (7) BCLR 687 (CC). 43 Id at para Minister of Health and Another NO v New Clicks South Africa (Pty) Ltd and Others (Treatment Action Campaign and Another as Amici Curiae) 2006 (2) SA 311 (CC); 2006 (1) BCLR 1 (CC) at para Above n 2 at para

25 NAVSA AJ limits. Section 145 of the LRA provides that a party may apply to set aside an arbitration award within six weeks of the date that the award was served on him or her. PAJA, on the other hand, requires that proceedings for judicial review be instituted without unreasonable delay and in any event not later than 180 days after exhaustion of internal remedies or after the person concerned became aware of the action involved and the reasons for it. The Supreme Court of Appeal relying on its decision and those of this Court emphasised that labour disputes require speedy resolution and the legislature, in prescribing the time period of six weeks in section 145(1) of the LRA, gave clear effect to this imperative. Thus, according to the court, it may be expected that the legislature would legislate different time periods in different fields and that did not militate against its earlier conclusions. [45] The Supreme Court of Appeal held that both Carephone and PAJA required the Labour Appeal Court to consider whether the Commissioner s decision to reinstate Mr Sidumo was rationally connected to the information before him and to the reasons he gave for it. According to it, the Labour Appeal Court had blurred the line between appeal and review by asking whether considerations taken into account by the Commissioner were capable of sustaining his finding. The question on review was not whether the record revealed relevant considerations that were capable of justifying the outcome, but rather whether the decision-maker properly exercised the powers entrusted to him. 25

26 NAVSA AJ [46] The Supreme Court of Appeal stated that the Mine had always considered Mr Sidumo s service record to be relevant. The Mine s case was that despite these factors continued employment was intolerable. Its complaint before the Labour Appeal Court properly characterised, was that the Commissioner s decision was tainted by reliance on misconceived considerations. The Labour Appeal Court did not apply the rational objective test explained in Carephone, which was in line with PAJA. It incorrectly asked whether there were factors capable of sustaining the Commissioner s findings, thereby treating the matter as an appeal rather than a review. [47] The Supreme Court of Appeal noted that the Commissioner took four factors into account. In its view the Labour Appeal Court rightly rejected three of them, namely, absence of loss, mistake and no dishonesty. The fourth that the misconduct did not go to the heart of the employment relationship was, in the view of the Supreme Court of Appeal, also incorrect. It considered the failure to search, not to be peripheral malperformance, but a profound failure at the very core of the employee s functions. 46 The employer trusted Mr Sidumo to carry out searches. His failure necessarily violated that trust. [48] The Supreme Court of Appeal held that it could not be said that the decision to reinstate Mr Sidumo was rationally connected to the information before the Commissioner. The following appears in the judgment of the Supreme Court of Appeal: 46 Above n 2 at para

27 NAVSA AJ Nor does PAJA oblige us to pick and choose between the commissioner s reasons to try to find sustenance for the decision despite the bad reasons. Once the bad reasons played an appreciable or significant role in the outcome, it is, in my view, impossible to say that the reasons given provide a rational connection to it. 47 [49] Because of the time lapse, the parties agreed that, in the event of the award being set aside, it would not be in the interests of justice to remit the matter and that the Supreme Court of Appeal should finally decide it. In the result, the Supreme Court of Appeal upheld the dismissal of Mr Sidumo and set aside the decisions of the Labour Appeal Court, Labour Court and the Commissioner. Is a constitutional issue raised? [50] It is accepted by the parties that this case raises constitutional issues. It involves the interpretation and application of the LRA and PAJA. These statutes were enacted to give effect to the rights contained in sections 23 and 33 of the Constitution, respectively. Thus, matters relating to the application and interpretation of the LRA and PAJA are constitutional matters. 48 [51] In addition, this case concerns the powers and functions of the Labour Court. The Labour Court and the Labour Appeal Court, both of which were established in terms of the LRA, are courts which have the same status as the High Court and 47 Id at para Bato Star above n 42 at para 25; National Union of Metalworkers of South Africa and Others v Bader Bop (Pty) Ltd & Another 2003 (3) SA 513 (CC); 2003 (2) BCLR 182 (CC) at para 15; National Education Health and Allied Workers Union v University of Cape Town and Others 2003 (3) SA 1 (CC); 2003 (2) BCLR 154 (CC) (NEHAWU) at paras

28 NAVSA AJ Supreme Court of Appeal, respectively. The powers and functions of the courts are constitutional issues. 49 COSATU s standing and condonation [52] It is true that COSATU was not a party to the preceding litigation. It is equally true that until the litigation in the Supreme Court of Appeal, it could not be predicted that Mr Sidumo s individual dismissal would result in the findings that are in issue before us. [53] Relevant factors to be considered in deciding whether to grant COSATU leave to pursue an appeal at this stage are set out in Campus Law Clinic, University of KwaZulu-Natal v Standard Bank of South Africa Ltd and Another: 50 [W]hether there is another reasonable and effective manner in which the challenge may be brought; the nature of the relief sought and the extent to which it is of general and prospective application; the range of persons or groups who may be directly or indirectly affected by any order made by the Court and the opportunity that those persons or groups have had to present evidence and argument to the Court; the degree of vulnerability of the people affected; the nature of the rights said to be infringed; as well as the consequences of the infringement. The list of factors is not closed. 51 (Footnotes omitted.) 49 Sections 151(2) and 167(3) of the LRA read with sections 166(e) and 170 of the Constitution. See also Phillips and Others v National Director of Public Prosecutions 2006 (1) SA 505 (CC); 2006 (2) BCLR 274 (CC); 2006 (1) SACR 78 (CC) at para 31; Bannatyne v Bannatyne (Commission for Gender Equality, as Amicus Curiae) 2003 (2) SA 363 (CC); 2003 (2) BCLR 111 (CC) at para (6) SA 103 (CC); 2006 (6) BCLR 669 (CC). 51 Id at para

29 NAVSA AJ [54] COSATU is acting, at the very least, on behalf of all of its members and the outcome of this case is generally of importance to employees, who are a vulnerable group in society. In addition, I am satisfied that a proper case has been made for condonation of the late filing of COSATU s papers as well as Mr Sidumo s late application for leave to appeal. The Constitution and the statutory scheme [55] The starting point is the Constitution. Section 23(1) provides that everyone has the right to fair labour practices. 52 Although the right to fair labour practices extends to employees and employers alike, 53 for employees it affords security of employment. [56] One of the primary purposes of the LRA is to give effect to the fundamental rights conferred by section 23 of the Constitution. The relevant parts of section 1 of the LRA read as follows: The purpose of this Act is to advance economic development, social justice, labour peace and the democratisation of the workplace by fulfilling the primary objects of this Act, which are (a) to give effect to and regulate the fundamental rights conferred by section 23 of the Constitution; (b) to give effect to obligations incurred by the Republic as a member state of the International Labour Organisation;... (d) to promote In NEHAWU above n 48 this Court recorded that our Constitution is unique in constitutionalising the right to fair labour practices. Since the advent of our Constitution, Malawi has followed suit. See Cheadle et al South African Constitutional Law: The Bill of Rights 2 ed (LexisNexis Butterworths, Durban 2005) at 18-8 at fn NEHAWU above n 48 at paras

30 NAVSA AJ (iv) the effective resolution of labour disputes. [57] Section 3 of the LRA provides that any person applying the provisions of the LRA must interpret its provisions to give effect to its primary objects; in compliance with the Constitution; and in compliance with the public international law obligations of the Republic. Commissioners are thus obliged to act accordingly. [58] Section 185 of the LRA provides that every employee has the right not to be unfairly dismissed and subjected to unfair labour practices. Where an employee claims that he or she has been unfairly dismissed, the dismissal dispute is submitted to compulsory arbitration in terms of section 191(5)(a), either before the CCMA, or a bargaining council. On the other hand, section 192 of the LRA, under the title Onus in dismissal disputes, provides that once an employee establishes the existence of the dismissal, the employer must prove that the dismissal is fair. [59] The statutory scheme requires a commissioner to determine whether a disputed dismissal was fair. In terms of section 138 of the LRA, a commissioner should do so fairly and quickly. First, he or she has to determine whether or not misconduct was committed on which the employer s decision to dismiss was based. 54 This involves an inquiry into whether there was a workplace rule in existence and whether the employee breached that rule. This is a conventional process of factual adjudication in which the commissioner makes a determination on the issue of misconduct. This 54 See Article 7 of the Code. 30